WebMD Health Corp. (NASDAQ:WBMD) — This company is known to millions for its web-based health information content. It provides services to consumers, physicians, health care professionals and employers, as well as health plans.
Revenues have grown from $470 million in 2012 to $580.5 million in 2014, and S&P Capital IQ estimates they will increase another 9%-10% in 2015 and 2016. This is based on predictable and growing online advertising spending in the health and wellness area, especially in the pharmaceutical, biotechnology and medical device fields.
WebMD initiated a 2 million share buyback program in 2014. Earnings more than tripled from $0.31 per share in 2013 to $0.97 in 2014. The consensus estimate is for EPS of $1.30 in 2015 and $1.50 in 2016.
Analysts’ mean price target for WBMD stock is $47.67; however, there is a wide spread between the low target at $46 and high of $60. Capital IQ views WebMD as a possible acquisition target with a price valuation of $56 based on P/E comparisons.
Technically, WBMD stock broke from a bull channel on Tuesday, confirming the break above its 200-day moving average in late February had held. The break was preceded by three buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR). And it was recently supported by higher-than-average volume and a strong buy signal from the MACD indicator.
WBMD stock fell 2.2% in after-market trading to $46, taking back Tuesday’s intraday gain. But I view this pullback as a positive since $46 is my buy under price. My trading target is the July high at $53, which is 15% above the current price.
